Conduct Issues with Condo Tenants Requires Fast Action…Or Else!

Ontario’s Condominium Act is constantly undergoing significant changes, but one thing hasn’t changed since the Act became law in 1998.  About 50% of the units in condos are investor-owned rentals.  And sometimes a tenant’s conduct creates problems for other owners or residents.

I have a lot of clients who are owners of condos, bought for investment purposes, who run into trouble with tenant conduct issues, usually noise, drunken parties, prostitution etc.  Certainly a big part of the problem stems from the the fact that too many condo investors think of themselves only as investors and not as business owners.  They are both; and they neglect the latter at their peril.

The Condominium Act prescribes obligations on unit owners (the landlord) with respect to their tenants.  Owners must make sure tenants receive a copy of the Rules, Declaration and Bylaws of the Corporation, and must make sure the tenants know they are responsible to abide by them.  The lease signed by the tenant should have a clause in the Appendix wherein they acknowledge that they have received and will comply with same.

Most condo Declarations and Rules have carefully drafted wording such as:  

The owner of each unit shall comply and shall require all residents and visitors to comply with the Act, the Declaration, the By-Laws and the Rules.

Each owner and resident of the Condominium shall be responsible for the acts and omissions of their family members, tenants, guests, licensees and invitees.

No owner or resident shall create or permit the creation or continuation of any noise or nuisance (wither within a unit or on the common elements) which, in the opinion of the board or property manager, may or does disturb the comfort or quiet enjoyment of the units or common elements by the owners or their family members, tenants, guests, licensees and invitees.

When the day comes when the management company calls and writes the owner advising them that there are noise or other conduct issues caused by their tenants, most owners don’t act quickly enough.  Usually they call their Realtor who sold them the unit and yell at them. Not too effective.  And Realtors don’t know the ins and outs of the law.

Even a warning by condominium’s management that the Corporation’s solicitor may be retained to engage in mandatory mediation and arbitration under s.132 of the Condominium Act usually is met with inaction by owners.  Section 134 of the Act permits a corporation to make application to the Superior Court for a compliance order against the owner and tenant.  Legal costs in obtaining same may be as high as $35,000, even higher if the issues are complicated and respondents contest the application.  Whatever costs or damages are assessed against the owner get tacked on to their common expenses.  

Addition to common expenses
134(5)  If a corporation obtains an award of damages or costs in an order made against an owner or occupier of a unit, the damages or costs, together with any additional actual costs to the corporation in obtaining the order, shall be added to the common expenses for the unit and the corporation may specify a time for payment by the owner of the unit. 1998, c. 19, s. 134 (5).

And not only that, a statutory lien is created in priority to almost every registered encumbrance. The Corporation could even sell the unit to satisfy payment.

Lien upon default
85.  (1)  If an owner defaults in the obligation to contribute to the common expenses, the corporation has a lien against the owner’s unit and its appurtenant common interest for the unpaid amount together with all interest owing and all reasonable legal costs and reasonable expenses incurred by the corporation in connection with the collection or attempted collection of the unpaid amount. 1998, c. 19, s. 85 (1).

Owners need to take tenant conduct issues seriously.  A discussion with the tenants followed up with a letter might be appropriate the first time, but at the second complaint by the management company, the owner needs to serve the appropriate Landlord and Tenant Board notice(s) seeking termination of the tenancy.  Only by immediately taking all reasonable steps through the Residential Tenancies Act does the owner protect themselves against a Compliance Order under the Condominium Act.

Property management companies must be forthcoming with dates, times and specifics, even video recordings, both for the purpose of these statutory RTA notices, and evidence at a hearing.  Witnesses, in particular security staff, should be made available and summonsed to the Landlord and Tenant Board hearing. 

Often by the time a paralegal is retained, the unit owner and tenant have already received the first warning letter (basically a form letter) from the Corporation’s solicitors, at a cost of about $800 tacked on to their common element costs.  These letters may not be legally enforceable, but it still takes time and money to contest them.  The first thing I do is write the Corporation’s counsel, advise them that I’ve been retained to commence proceedings at the Landlord and Tenant Board, and ask them to forebear until such time as the proceeding has concluded.

Usually the first step is to have an LTB N5 notice drafted and served to the tenant.  If the tenants correct their offending behaviour within the 7 days following service, the notice becomes void and you cannot file an application to the LTB.  The Corporation may wonder why you haven’t moved on with an eviction application to the LTB.  It’s up to the owner or their paralegal to explain to the corporation and their solicitors what the Landlord and Tenant Board process entails.

What if after a hearing, the Landlord and Tenant Board decides not to evict?  Assuming that the paralegal retained for the LTB proceeding has acted properly and the Board still chose not to evict, it’s likely that by simply making a good faith attempt to evict the tenant based on their conduct,this will protect the owner against the costs of a compliance order.  I’ve noticed in a lot of the condo cases recently based on s.134 applications, the Courts are wary of the high costs charged to the corporation (which flow through to the unit owner) as there is really no incentive for the law firm or condo corporation to keep costs down. There is a trend towards condo corporations pulling the s.134 trigger too quickly, but an opposing trend pressing the Corporations into mandatory mediation and arbitration prior to seeking a compliance order.

Paralegals and investors need to give these types of problems their full attention in order to prevent a costly outcome for the owner.  If you are a landlord looking for information on evictions for conduct, check out our Eviction for Conduct Webinar here: On Demand Landlord Webinars

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